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The Internet of Things (IoT) is beginning to really take flight, and companies need to adapt their IT architectures to accommodate this new world wonder. But how can a company do so smoothly? In an article for McKinsey & Company, Johannes Deichmann, Matthias Roggendorf, and Dominik Wee elaborate on that “how.”

Toward a More Connected World

What precisely is the IoT? It is the networking of physical objects through the utilization of embedded sensors, actuators, and other devices. A simple example of this is items like smart watches or, in the B2B market, shipping and storage equipment. A McKinsey Global Institute report finds that the IoT will have an economic impact of as much as $11 trillion per year by 2025.

But transition is never easy, and moving from traditional enterprise IT architecture towards IoT will prove challenging. In order to make this integration a success, companies will need to focus on actively participating in setting the industry’s standards, exploring modular approaches to digital application, altering information collection, and reconsidering how to manage existing products with the new IoT.

Forty percent of the $11 trillion impact to the economy will bring new opportunities in interoperability such as factories, cities, retail environments, and more. Presently there are over 9 billion connected devices around the globe. Despite this, corporations are only just now beginning to invest in technology to reap the benefits of this. One problem companies are facing is that they are building complexities into their IT architectures rather than simplifying their processes. In order to get the full value out of IoT, companies will need to invest in higher-quality security measures. There will be a great deal of room for breaches and compromised IoT security. A good hacker could potentially shut down millions of household devices.

In order to get the full optimal value of IoT, companies will need to build consumer trust, promote collaborations with other companies or industries, and ensure security. Summed up, companies will need “digital resilience.” In strengthening their partnerships, companies should look into investing in modular IoT stacks with open-source components that can stand independently. This is not necessarily an easy task, especially for older IT architecture that may not even be able to handle it, but it will prove useful. There are several integration models that exist in an effort to make this transition smoother.